Ahli United Bank (AUB) said it would pay 50.9 million rials ($132 million) for a 35 per cent stake in Oman's biggest mortgage lender, trumping a takeover offer by Bank Muscat.

The bank said it had signed a memorandum of understanding with Alliance Housing Bank (AHB) of Oman.

Under the terms of the MOU, AUB will acquire 35 per cent of AHB through its full subscription of AHB’s proposed new capital increase.

AUB will acquire a total of 113 million common shares for a total consideration of RO50.9 million subject to obtaining all necessary regulatory and shareholder approvals in Bahrain and Oman. 

Ahli United Bank chairman Fahad Al Rajaan said the new agreement represented yet another important step in the series of AUB’s successful strategic investments to establish a strong Pan Gulf banking group.

AUB now has an effective banking presence in Bahrain, Kuwait, Qatar, Egypt, Iraq, UK and finally Oman through its new alliance with AHB. 

Oman has attracted the interest of regional and international investors owing to the availability of abundant and promising investment opportunities in Oman, Al Rajaan added. 

Bahrain's largest lender by market value said it had signed a memorandum of understanding with Alliance Housing Bank to buy the stake through subscription to a capital raising by the Omani lender.

If Alliance Housing, which was targeted by Bank Muscat last month, issued enough shares to give Ahli United a 35 per cent stake, it would have to sell 113 million new shares on top of its 210 million shares outstanding.

That would value Alliance's bid at about 0.450 rials per share, a 19.8 per cent premium on its closing share price on Thursday. Bank Muscat offered 0.375 rials per share offer until it declared the offer void on Thursday.

Ahli United said the deal is subject to approval by Omani and Bahraini authorities. Alliance said it had asked Egyptian investment bank EFG-Hermes to study takeover offers.

Alliance's biggest shareholder, Oman National Investment Holding, said last month it was looking for a higher price after Bank Muscat made its offer.

Separately, Kuwait's Tamdeen Investment said yesterday it is studying plans to sell its stake in Ahli United Bank, which itself has been named by newspapers as takeover target.

'Tamdeen is currently studying ... selling all its shares in Ahli United Bank and the effect of that on the firm's current and future profits,' the firm said.

Al Rai daily said Kuwait Projects (KIPCO) and a Saudi bank are competing to buy a majority stake in the Bahrain lender.

Al Qabas newspaper said on June 2 an unidentified Kuwaiti investment group had made an offer to buy 51pc of Ahli United.

Ahli United Bank said on May 21 it was not aware if reports an investor was planning to buy a majority stake were accurate or not.

The bank issued a similar statement in April, when a Qabas report said unidentified Arab and international banks had made offers to buy a strategic stake in AUB, and that one suitor was willing to pay $2 a share.